BILL NUMBER: AB 2041	CHAPTERED  09/20/00

	CHAPTER   552
	FILED WITH SECRETARY OF STATE   SEPTEMBER 20, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 18, 2000
	PASSED THE ASSEMBLY   AUGUST 25, 2000
	PASSED THE SENATE   AUGUST 24, 2000
	AMENDED IN SENATE   AUGUST 14, 2000
	AMENDED IN SENATE   AUGUST 7, 2000
	AMENDED IN ASSEMBLY   APRIL 27, 2000

INTRODUCED BY   Assembly Member Dutra

                        FEBRUARY 18, 2000

   An act to add and repeal Section 33334.25 of the Health and Safety
Code, relating to redevelopment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2041, Dutra.  Redevelopment:  affordable housing.
   Under the Community Redevelopment Law, one of the fundamental
purposes of redevelopment is to expand the supply of low- and
moderate-income housing.  Existing law also authorizes the Department
of Housing and Community Development to make grants to nonprofit
housing sponsors and local public entities in constructing,
rehabilitating, and operating assisted housing for low- and
moderate-income households.
   This bill would authorize contiguous agencies located within
adjoining cities in a Metropolitan Statistical Area to create and
participate in a joint powers authority in order to pool their
housing funds to pay for the direct costs of constructing,
substantially rehabilitating, or preserving the affordability of
housing units that are affordable to very low or low income
households.
   The bill would also require that specified conditions be met and
described in a mutually binding contract between the joint powers
authority and each participating agency and a receiving entity for
the use and transfer of pooled housing funds, and that the conditions
include, among other things, a determination by the department that
the community of each participating agency has adopted housing
elements that are in compliance with existing law and that the
proposed use of pooled funds by the receiving entity for these
purposes is in compliance with these provisions.
   The bill would, on or after January 1, 2008, prohibit a
participating agency from creating a new joint powers authority or
transferring funds to an existing joint powers authority unless a
later enacted statute deletes or extends that date.
   This bill would repeal these provisions on January 1, 2010.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 33334.25 is added to the Health and Safety
Code, to read:
   33334.25.  (a) The Legislature finds and declares all of the
following:
   (1) The transfer of funds to a joint powers authority and the use
of pooled funds within the housing market area of the participating
agencies for the purpose of providing affordable housing is of
benefit to the project area producing the tax increment.
   (2) The cost and availability of land, geophysical and
environmental limitations, community patterns, and the lack of
financing make the availability of affordable housing more difficult
in some communities.
   (3) The cooperation of local agencies and the use of pooled funds
will result in more resources than would otherwise be available for
affordable housing.
   (b) Notwithstanding any other provision of law, contiguous
agencies located within adjoining cities within a single Metropolitan
Statistical Area (MSA) may create and participate in a joint powers
authority for the purpose of pooling their low- and moderate-income
housing funds for affordable housing uses.  Agencies may transfer a
portion of their housing funds to a joint powers authority for use by
the joint powers authority pursuant to this section.  The joint
powers authority may determine the kinds of housing projects or
activities to be assisted, consistent with this section.  The joint
powers authority may loan, grant, or advance transferred housing
funds from participating agencies to a receiving entity for any
eligible housing development within the participating agency's
jurisdiction, subject to the requirements of this section.  In
addition, the agreement may authorize the joint powers authority to
issue bonds and to use the pooled funds to leverage other funds to
assist eligible developments, including loans from private
institutions and assistance provided by other governmental agencies.

   (c) Each of the following conditions shall be met and described in
a mutually binding agreement between the joint powers authority and
each participating agency:
   (1) The community of each participating agency shall have adopted
up-to-date housing elements pursuant to Article 10.6 (commencing with
Section 65580) of Division 1 of Title 7 of the Government Code, and
the housing elements have been determined to be in compliance with
the law by the Department of Housing and Community Development.
   (2) The community of each participating agency shall have met, in
its current or previous housing element cycle, 50 percent or more of
its share of the region's affordable housing needs, as defined in
Section 65584 of the Government Code, in the very low and lower
income categories of income groups defined in Section 50025.5.
   (3) Each participating agency shall hold, at least 45 days prior
to the transfer of funds to the joint powers authority, a public
hearing, after providing notice pursuant to Section 6062 of the
Government Code to solicit public comments on the draft agreement.
   (4) No housing funds shall be transferred from a project area that
has an indebtedness to its low- and moderate-income housing fund
pursuant to Section 33334.6.
   (5) No housing funds shall be transferred from an agency that has
not met its need for replacement housing pursuant to Section 33413,
unless the agency has encumbered and contractually committed
sufficient funds to meet those requirements.
   (6) Pooled funds shall be used within the participating agencies'
jurisdictions.
   (7) The agreement shall require compliance by the joint powers
authority with the provisions of this section.
   (8) The joint powers authority shall ensure that the funds it
receives are used in accordance with the requirements of this
section.
   (9) Funds transferred by an agency to a joint powers authority
pursuant to this section shall be expended or encumbered by the joint
powers authority for the purposes of this section within two years
of the transfer.  Transferred funds not so expended or encumbered by
the joint powers authority within two years after the transfer shall
be returned to the original agency and shall be deemed excess surplus
funds as provided in, and subject to, the requirements of Sections
33334.10 and 33334.12.  Excess surplus funds held by an agency may
not be transferred to a joint powers authority.
   (10) The joint powers authority shall prepare and submit an annual
report to the department that documents the amount of housing funds
received and expended or allocated for specific housing assistance
activities consistent with Sections 33080.4.
   (d) Each of the following conditions shall be met and described in
a mutually binding contract between the joint powers authority and a
receiving entity:
   (1) Pooled housing funds may only be used to pay for the direct
costs of constructing, substantially rehabilitating, or preserving
the affordability of housing units that are affordable to very low or
low income households.  Units assisted with pooled funds shall
remain available at affordable housing costs in accordance with
subdivision (f) of Section 33334.3.
   (2) Except as provided in this section, pooled housing funds may
not be used in any way that is inconsistent with the requirements of
Section 33334.3.  Pooled housing funds may not be used to pay for
planning and administrative costs, offsite improvements associated
with a housing project, or fees or exactions levied solely for
development projects constructed, substantially rehabilitated, or
preserved with pooled funds.  The receiving entity shall be subject
to the same replacement requirements provided in Section 33413 and
any relocation requirements applicable pursuant to Section 7260 of
the Government Code.
   (3) The joint powers authority shall make findings, based on
substantial evidence on the record, that each proposed use of pooled
funds will not exacerbate racial or economic segregation.
   (4) The Department of Housing and Community Development has
evaluated each proposed use of pooled funds to construct,
substantially rehabilitate, or preserve the affordability of housing
and determined that the proposed use is in compliance with this
section.  In considering whether a proposed use of funds will
exacerbate racial or economic segregation, the department shall
consider all of the following:
   (A) The record of participating jurisdictions in meeting their
share of the regional need for low and very low income households
allocated to the jurisdiction pursuant to Section 65584 of the
Government Code.
   (B) The distance of the proposed housing from a redevelopment area
from which pooled funds originated.
   (C) The income and ethnicity of the residents of the census tract
from which the pooled funds originated and in which the housing will
be located.
   (D) The housing need and availability of sufficient site for
housing within jurisdictions from which pooled funds originated.
   (e) As used in this section, the following terms shall apply:
   (1) "Housing funds" mean funds in or from the low- and
moderate-income housing fund established by an agency pursuant to
Section 33334.3.
   (2) "Joint powers authority" means a joint powers authority
created pursuant to Chapter 5 (commencing with Section 6500) of
Division 7 of Title 1 of the Government Code for the purposes of
receiving and using housing funds pursuant to this section.
   (3) "Receiving entity" means any person, partnership, joint
venture, corporation, governmental body, or other organization
receiving housing funds from a joint powers authority for the purpose
of providing housing pursuant to this section.
   (f) On or after January 1, 2008, no participating agency shall
create a new joint powers authority or transfer funds to an existing
joint powers authority pursuant to this section, unless a later
enacted statute, which is enacted before January 1, 2008, deletes or
extends that date.
   (g) This section shall remain in effect only until January 1,
2010, and as of that date is repealed, unless a later enacted
statute, that is enacted on or before January 1, 2010, deletes or
extends that date.
